IFC Launches $225 million Platform for Startups in Africa, others

Funding to shape Africa's digital ecosystem "is an idea whose time has come," says Strive Masiyiwa (left), the Founder and Executive Chairman of Econet Group, with IFC Managing Director Makhtar Diop. Photo by Dave Bird/IFC

Global development institution focused on enabling startups scale, International Finance Corporation (IFC) has launched a $225 million funding platform to invest in early-stage startups in Africa, Middle East, Central Asia, and Pakistan.

IFC’s new $225 million funding platform will go to venture capital firms and companies that are already addressing development challenges through technological innovations in climate, health care, education, agriculture, e-commerce, and other sectors.

It will help innovative tech companies in Africa, the Middle East, Central Asia, and Pakistan expand during a time of capital shortage and create scalable investment opportunities.

Makhtar Diop, IFC’s Managing Director, says: “Support for entrepreneurship and digital transformation is essential to economic growth, job creation and resilience.” He added that the firm wants to help develop homegrown innovative solutions that are not only relevant to emerging countries but to the rest of the world.

Strengthening nascent digital economies  

In Africa, the Middle East, Central Asia, and Pakistan, the potential of the digital economy is enormous. In Africa, for example, the digital economy has the potential to contribute $712 billion to the continent’s gross domestic product (GDP) by 2050.

In Pakistan, the digital transformation can unlock up to $59.7 billion in annual economic value by 2030, equivalent to about 19 percent of the country’s GDP. In the Middle East and North Africa, technology could boost GDP by 40 percent, or $1.6 trillion, and create 1.5 million manufacturing jobs in the next 30 years.

For startups in Africa, IFC’s new venture capital funding platform “is an idea whose time has come,” said Strive Masiyiwa, the Founder and Executive Chairman of Econet Group, which comprises Cassava Technologies and Econet Wireless. “A new generation of African entrepreneurs is emerging who are in need of this kind of partnership from IFC. Young African entrepreneurs have been crying out for more venture capital, and now they can step forward and take advantage of this initiative.”

Some of IFC’s ongoing investments in Africa’s digital markets are already transforming economies—and the lives and livelihoods of Africans. One startup IFC has impacted is TradeDepot, an end-to-end distribution platform founded to simplify and digitize micro retail distribution, supplying tens of thousands of small-scale retailers in Nigeria, South Africa, and Ghana with hundreds of products, from detergents to spices and toothpastes.

The ability to attract co-investors is especially important in fragile and conflict-affected situations. While the platform will invest in established venture capital markets in the region, such as Egypt, the Gulf Cooperation Council, Kenya, Nigeria, and South Africa, the platform will also focus on investments in underserved markets, with an emphasis on building a pipeline of credible early-stage companies and shaping a tech ecosystem.

To bolster the effectiveness of the platform in these markets, IFC will collaborate throughout the World Bank Group to create regulatory reforms, sector analyses, and tools used by successful venture capital ecosystems.

The venture capital platform will be backed by an additional $50 million from the Blended Finance Facility of the International Development Association’s Private Sector Window, which helps de-risk investments in low-income countries.

In addition, IFC will mobilize capital from other development institutions and the private sector to support entrepreneurs and tech companies in those countries.

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